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Bank of Georgia (BGEO)

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Monday 11 December, 2006

Bank of Georgia

3rd Quarter Results

Bank of Georgia
                  

NOT FOR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA,
AUSTRALIA, CANADA OR JAPAN

JSC Bank of Georgia Consolidated YTD September 2006 Results, IFRS, Unaudited,
Reviewed


1.736 GEL/US$ period end

                JSC BANK OF GEORGIA ANNOUNCES NINE MONTH RESULTS

IFRS, unaudited, reviewed

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Thousands, unless otherwise noted                 Nine months 2006    Growth y-o-y(1)
                                                    GEL       US$
Bank of Georgia (Consolidated, IFRS, Unaudited,
 Reviewed)
Revenue(2)                                          72,235   41,622             63.5%
Net Income                                          17,301    9,969             96.3%
Consolidated EPS (Basic),                             1.12     0.65             86.7%
Consolidated EPS (Diluted),                           1.12     0.65             86.7%
Adjusted EPS (3),                                     0.76     0.44
ROAA (Annualized)(4)                                   3.5%
ROAE (Annualized)( 4)                                 20.2%
*T

Bank of Georgia (LSE: BGEO, GSE: GEB), a leading Georgian universal bank,
announced today nine months consolidated results (IFRS, Unaudited, Reviewed),
reporting year to date Net Income of GEL 17.3 million (US$ 10.0 million), up 96%
year on year.

The Bank reported Net Interest Income before impairment of interest earning
assets of GEL 41.3 million (US$ 23.8 million), a 53% growth year on year, and
Net Fees and Commission Income of GEL 15.9 million (US$ 9.2 million) a 68%
increase year on year as at 30 September 2006. The Bank's Other Non-Interest
Income grew by 94% year on year to GEL 15.0 million (US$ 8.7 million), while
Other Non-Interest Expenses reached GEL 39.6 million (US$ 22.8 million), up by
49% year on year, for the nine months ended 30 September 2006.

The Bank's total assets were GEL 856.7 million (US$ 493.6 million), representing
an 86% growth year to date, which was largely driven by the increase in the loan
book to GEL 560.4 million (US$ 322.9 million), an 88% growth year to date. Total
equity(5 )reached GEL 137.1 million (US$ 79.0 million).

'I am delighted that the bank's profitable growth in the third quarter of 2006
continued following the strong results for the first half of 2006. The
highlights of the quarter were the Bank's success in attracting US$ 55 million
in aggregate in the form of non-deposit debt funding from Merrill Lynch, Thames
River Capital and HBK Investments and an aggregate of GEL 23.5 million (US$ 13.6
million) in equity funding raised through two capital increases in July and
September 2006. The Bank's client deposits grew to GEL 468.0 million (US$ 269.7
million), a 73% increase year to date. The debt and equity funding raised will
continue to support the rapid growth of the Bank's net loan book, which by 30
September 2006 grew by 88 % year to date, and compares to the 52% increase in
the total net loan portfolio of the Georgian banking system over the same
period. I am particularly pleased that we have been able to grow our market
share since the end of 2005,' commented Lado Gurgenidze, Chairman of the
Supervisory Board.

(1) Compared to the same period last year; growth calculations based on GEL
values

(2) Revenue includes net interest income before impairment of interest earning
assets, net fees & commissions income and other non-interest income

(3) Adjusted to reflect the number of shares outstanding following the bank's
offering of 7,440,207 new shares in the form of GDRs in late November and early
December 2006. The number of shares outstanding is the sum of the weighted
average number of ordinary shares outstanding during the nine months ended 30
September 2006 and 7,440,207 new shares in the form of GDRs issued in late
November and early December 2006. Such number of shares is 22,884,810 (excluding
the unawarded shares subscribed for by the bank's Executive Equity Compensation
Plan) as compared with the total of 25,180,620 number of shares outstanding as
of December 5, 2006

(4) Nine months average annualized

(5) Total equity is expected to have increased significantly as a result of the
offering of new shares in the form of GDRs that took place in late November and
early December 2006

The financial information as of and for the nine months ended September 30, 2006
contained in this news report is unaudited. The bank's results for an interim
period are not necessarily indicative of what its results will be for the full
year.

                              INCOME STATEMENT DATA

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                                                          For the nine months ended
                                                                 September 30
                                   Growth Year
                                    on Year(1)         2006(2)                 2005(3)
JSC Bank of Georgia Consolidated,
 IFRS, Unaudited, Reviewed                           (Unaudited)             (Unaudited)
thousands, unless otherwise noted                       US$         GEL         US$         GEL
Interest Income                           75.3%     36,372      63,123      20,088      36,007
Interest Expense                         141.1%     12,561      21,800       5,044       9,042
Net Interest Income                       53.2%     23,810      41,323      15,043      26,965
Impairment of Interest Earning
 Assets                                   90.4%      6,145      10,665       3,125       5,602
Net Interest Income After
 Impairment of Interest Earning
 Assets                                   43.5%     17,665      30,658      11,918      21,363
Fees & Commissions Income                 68.8%     11,399      19,783       6,538      11,720
Fees & Commissions Expense                71.3%      2,239       3,885       1,265       2,268
Net Fees & Commissions Income             68.2%      9,160      15,898       5,273       9,452
Gains less losses from foreign
 currencies
  - dealing                               77.2%      4,722       8,195       2,580       4,624
  - translation differences             NMF (4)       (174)       (302)         23          41
Net Insurance Premiums Earned             77.5%      2,544       4,415       1,387       2,487
Other Operating Income                   350.2%      1,559       2,706         335         601
Other Non-Interest Income                 93.7%      8,651      15,014       4,325       7,753
Salaries & Other Employee Benefits        31.8%     12,593      21,855       9,247      16,576
Administrative Expenses                   72.2%      7,666      13,304       4,311       7,727
Depreciation, Amortization &
 Impairment                               22.2%      2,207       3,830       1,749       3,135
Reversal of Impairment of Other
 Assets & Provisions                     -29.5%       (426)       (740)       (585)     (1,049)
Net Insurance Claims Incurred            404.8%        782       1,358         150         269
Other Non-Interest Expenses               48.6%     22,822      39,607      14,872      26,658
Income Before Income Tax Expense          84.4%     12,655      21,963       6,644      11,910
Income Tax Expense (Benefit)              50.6%      2,686       4,662       1,727       3,095
Net Income For The Period                 96.3%      9,969      17,301       4,918       8,815

EPS (Basic), GEL                          86.7%       0.65        1.12        0.33        0.60
EPS (Diluted), GEL                        86.7%       0.65        1.12        0.33        0.60
Adjusted EPS                            NMF (4)       0.69        0.44      NMF (4)     NMF (4)
*T

(1) Compared to the same period last year; growth calculations based on GEL
values

(2) Converted to U.S. dollars for convenience using an exchange rate of GEL
1.736 per US$1.00, being the official Georgian Lari to U.S. dollar exchange rate
as reported by National Bank of Georgia on 30 September 2006.

(3) Converted to U.S. dollars for convenience using an exchange rate of GEL
1.793 per US$1.00, being the official Georgian Lari to U.S. dollar exchange rate
as reported by National Bank of Georgia on 30 September 2005.

(4) Not meaningful

The financial information as of and for the nine months ended September 30, 2006
contained in this news report is unaudited. The bank's results for an interim
period are not necessarily indicative of what its results will be for the full
year.

                               BALANCE SHEET DATA

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                                              September 30,             December 31,
                                                 2006(2)                  2005(3)
                               Year to
                                 Date
                               Growth(1)       (Unaudited)               (Audited)
JSC Bank of Georgia
 Consolidated, IFRS                          US$         GEL          US$          GEL
thousands, unless otherwise
 noted
Assets
Cash and cash equivalents          103.5%    67,118      116,483       31,922       57,236
Amounts due from credit
 institutions                       68.2%    32,378       56,192       18,627       33,398
Loans to customers, net             88.4%   322,906      560,403      165,854      297,376
Net investments in lease           109.9%     5,216        9,053        2,406        4,314
Investment securities:
    -available-for-sale            -26.0%     3,550        6,161        5,643        8,327
    -held-to-maturity              -88.9%       146          253          273        2,280
Property and equipment, net         46.9%    30,324       52,627       19,975       35,815
Intangible assets, net             232.5%    14,723       25,551        4,286        7,685
Income tax assets                  NMF(4)         -            -        1,433        2,570
Prepayments                        604.8%     1,848        3,207          254          455
Other assets                       141.0%    15,433       26,784        6,199       11,114
Total assets                        86.0%   493,641      856,714      256,871      460,570

Liabilities
Amounts owed to credit
 institutions                      183.0%   128,610      223,203       43,989       78,873
Amounts owed to customers           73.4%   269,659      467,993      150,559      269,952
Debt securities issued              -1.3%       650        1,128          637        1,143
Income tax liabilities              86.0%     2,236        3,881        1,164        2,087
Provisions                         NMF(4)         -            -          544          975
Other liabilities                   45.7%    13,500       23,430        8,967       16,078
Total liabilities                   95.0%   414,656      719,635      205,861      369,108

Equity
Share capital                       13.6%     9,644       16,738        8,215       14,729
Share premium                       81.8%    34,495       59,866       18,361       32,922
Treasury shares                    148.1%      (116)        (201)         (45)         (81)
Retained earnings                   44.9%    31,248       54,231       20,874       37,427
Other reserves                      -1.6%     3,045        5,285        2,994        5,369
Total equity attributable to
 shareholders                       50.4%    78,317      135,919       50,399       90,366
Minority interest                    5.8%       668        1,160          611        1,096
Total equity                        49.9%    78,985      137,079       51,011       91,462
Total liabilities and equity        86.0%   493,641      856,714      256,871      460,570
*T

(1) Growth calculations based on GEL values

(2) Converted to U.S. dollars for convenience using an exchange rate of GEL
1.736 per US$1.00, being the official Georgian Lari to U.S. dollar exchange rate
as reported by National Bank of Georgia on 30 September 2006

(3) Converted to U.S. dollars for convenience using an exchange rate of GEL
1.793 per US$1.00, being the official Georgian Lari to U.S. dollar exchange rate
as reported by National Bank of Georgia on 31 December 2005

(4) Not meaningful

The financial information as of and for the nine months ended September 30, 2006
contained in this news report is unaudited. The bank's results for an interim
period are not necessarily indicative of what its results will be for the full
year.

RATIOS

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                                                           September   December
                                                             30, 2006   31, 2005
JSC Bank of Georgia Consolidated Ratios, IFRS, Unaudited
Profitability
ROAA (1)                                                         3.5%*       3.3%
ROAE (2)                                                        20.2%*      18.5%
Net Interest Margin (3)                                         10.0%*      11.9%
Interest Expense to Interest Income                              34.5%      25.2%
Net Fee & Commission Income to Total Operating Income (4)        22.0%      22.4%
Interest Income to Average Interest Earning Assets (3)           15.3%      15.9%
Cost of Funds (5)                                                 5.6%       4.0%
Net Spread (6)                                                    9.7%      11.8%
Net Non-Interest Income to Total Operating Income (7)            42.8%      39.7%
Efficiency Ratios
Other Non-Interest Expense to Average Total Assets               8.0%*      10.0%
Salaries & Other Employee Benefits to Total Operating
 Income (8) (9)                                                  30.3%      36.2%
Salaries & Other Employee Benefits to Other Non-Interest
 Expense (8)                                                     55.2%      56.3%
Liquidity Ratios
Net Loans to Total Assets                                        65.4%      64.6%
Net Loans to Amounts Owed to Customers                          119.7%     110.2%
Net Loans to Total Deposits (9)                                  99.7%      96.8%
Net Loans to Total Liabilities                                   77.9%      80.6%
Interest Earning Assets to Total Assets (3)                      83.7%      83.7%
Liquid Assets to Total Assets (10)                               14.3%      14.2%
Total Deposits to Total Assets (9)                               65.6%      66.7%
Amounts Owed to Customers to Total Deposits                      83.3%      87.9%
Amounts Owed to Customers to Total Equity (times)                3.41       2.95
Amounts Due From Credit Institutions to Amounts Owed to
 Credit Institutions, except for Borrowings from
 International Credit Institutions                               59.7%      89.9%
Total Equity to Net Loans                                        24.5%      30.8%
Leverage, times (11)                                              5.2        4.0
Asset Quality
Allowance at Period End for Loan Impairment to Gross Loans
 (12)                                                             3.7%       5.4%
Capital Adequacy (At Period End) (13)
Consolidated Tier I Capital Adequacy Ratio (14)                  19.2%      23.0%
Consolidated Total Capital Adequacy Ratio (14) (15)              25.2%      24.0%
Standalone Tier I Capital Adequacy Ratio (16)                    19.8%      23.6%
Standalone Total Capital Adequacy Ratio (16) (17)                24.4%      23.8%
*Nine month average annualised in 2006
*T

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(1) Return on average total assets
(2) Return on average total equity
(3) Net Interest Income before impairment of interest earning assets divided by average interest
 earning assets. Interest earning assets include time deposits with credit institutions with effective
 maturity up to 90 days, amounts due from credit institutions, loans to customers, minimum lease
 payments receivable and investment securities.
(4) Total operating income includes net interest income before impairment of interest earning assets,
 net fees and commissions income and other non-interest income
(5) Cost of funds equals interest expense over the average amounts owed to credit institutions,
 amounts owed to customers and debt securities issued
(6) Net spread is calculated as the difference between interest income to average interest earning
 assets and interest expense to average interest bearing liabilities
(7) Net non-interest income is the sum of net fees and commissions income and other non-interest
 income
(8) Salaries and other employee benefits amount to GEL21.9 million as of 30 September 2006
(9) Total deposits include amounts owed to customers and amounts owed to credit institutions except
 for the borrowings from credit institutions
(10) Liquid assets include cash and cash equivalents and investment securities available for sale.
 Liquid assets amount to GEL122.6 million as of 30 September 2006
(11) Total liabilities divided by total equity
(12) Allowance for loan impairment amounted to GEL 21.3 million as of 30 September 2006
(13) The bank's capital adequacy ratios are expected to have increased significantly as a result of
 the offering of new shares in the form of GDRs that took place in late November and early December
 2006.
(14) The consolidated Tier I capital adequacy ratio calculated in accordance with Basel Capital Accord
 standards. The consolidated Tier I capital adequacy ratio of the Bank equals the consolidated Tier I
 capital divided by the consolidated risk weighted assets. The consolidated Tier I capital amounted to
 GEL 130.8 million as of September 30 2006. The consolidated risk weighted assets amounted to GEL
 679.9 million as of 30 September 2006.
(15) The consolidated total capital adequacy ratio calculated in accordance with Basel Capital Accord
 standards. The consolidated total capital adequacy ratio of the Bank equals regulatory capital (Tier
 I + Tier II - deductions) divided by the consolidated risk weighted assets. The consolidated
 regulatory capital (Tier I + Tier II - deductions) amounted to GEL 171.4 million as at 30 September
 2006.
(16) The standalone Tier I capital adequacy ratio calculated in accordance with Basel Capital Accord
 standards. The standalone Tier I capital adequacy ratio of Bank of Georgia equals standalone Tier I
 capital divided by standalone risk weighted assets. The standalone Tier I capital amounted to GEL
 130.9 million as of 30 September 2006. The standalone risk weighted assets amounted to GEL 660.4
 million as at September 30, 2006.
(17) The standalone total capital adequacy ratio is calculated in accordance with Basel Capital Accord
 standards. The standalone total capital adequacy ratio of the Bank equals the standalone regulatory
 capital (Tier I + Tier II - deductions) divided by the standalone risk weighted assets. The
 standalone regulatory capital (Tier I + Tier II - deductions) amounted to GEL 161.2 as at 30
 September 2006.
*T

The financial information as of and for the nine months ended September 30, 2006
contained in this news report is unaudited. The bank's results for an interim
period are not necessarily indicative of what its results will be for the full
year.

NOT FOR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA,
AUSTRALIA, CANADA OR JAPAN

*** For further information, please visit www.bog.ge/ir or contact:

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Bank of Georgia         Bank of Georgia    Bank of Georgia    Shared Value Limited
Lado Gurgenidze         Irakli Gilauri     Macca Ekizashvili  Larisa Kogut-Millings
Chairman of the         Chief Executive    Head of Investor
 Supervisory Board       Officer            Relations
+995 32 444 103         +995 32 444 109    +995 32 444 256    +44 (0) 20 7321 5037
lgurgenidze@bog.ge      igilauri@bog.ge    ir@bog.ge          bog@sharedvalue.net
*T

Bank of Georgia, a leading universal Georgian bank, is the largest bank by total
equity and total assets in the country. The bank has 98 branches and over
380,000 retail clients. The bank offers a full range of retail banking and
corporate and investment banking services to its customers across Georgia. The
bank also provides a wide range of corporate and retail insurance products
through its wholly-owned subsidiary, BCI, as well as asset & wealth management
services.

Bank of Georgia has 'B+/B' rating with a stable outlook from Standard & Poor's;
'B3/NP' (FC) and 'Baa3/P-3' (LC) ratings with a stable outlook from Moody's; and
a 'B-/B' credit rating with a positive outlook from FitchRatings.

This press release is not an offer of securities for sale in the United States.
The securities referred to herein have not been and will not be registered under
the US Securities Act of 1933, as amended (the 'Securities Act'), and may not be
offered or sold in the United States or to US persons unless the securities are
registered under the Securities Act or an exemption from the registration
requirements of the Securities Act is available. No public offering of the
securities will be made in the United States. Other selling restrictions are
applicable.

The financial information as of and for the nine months ended September 30, 2006
contained in this news report is unaudited and reflects the best estimates of
management. The bank's actual results may differ significantly from the amounts
reflected herein as a result of various factors. The bank's results for an
interim period are not necessarily indicative of what its results will be for
the full year.